Effects of organizational culture on strategy implementation in commercial banks in Kenya

Abstract

Commercial banks in Kenya have realised tremendous growth in the last five years and have expanded to the East African region. The banking industry in Kenya has also involved itself in automation, moving from traditional banking to better meet the growing complex needs of their customers and cope with globalization challenges. There has been increased competition from local banks as well as international banks, some of which are new players in the country with a varied array of organisational cultures hence a worthwhile sector to focus on in this study. Organizational culture is the shared values, beliefs and norms within an organization, and is the foundation from which strategy emerges. In order for strategy to receive sustained support, it must be aligned with organizational culture. Organization’s strategy requires a culture that is supportive of change. Strategic balancing is based on the principle that the strategy of a company is partly equivalent to the strategy of an individual. Indeed, the performance of companies is influenced by the actors’ behavior, including the system of leaders’ values. The study aimed at addressing this gap by examining the cultural manifestations in commercial banks in Kenya and their effects on strategy implementation. The study employed a census survey design targeting all licensed commercial banks in Kenya. The target population of this study was 43 representatives from all the 43 licenced commercial banks with Nairobi as the focus and commercial hub. The study used a questionnaire to collect primary data. The data was analyzed using both qualitative and quantitative techniques using Statistical Package for Social Sciences. The study found that for competitive advantage to be gained across Kenyan banks, strategy implementation should be aligned with strong organizational culture.